China Fruits Corp (CHFR) ($0.14) is a distributor and producer of fresh tangerine and other fresh fruits in the People’s Republic of China. We are Long CHFR, but know this is very speculative bet.
On August 19, 2014 we added CHFR to our watchlist due to significant increases in revenues and net income in its Q2 2014 results. We have decided to make a purely speculative bullish bet.
- The company reported EPS of $0.01 for its Q2 2014.
- Sales increased 197%:
- Pumpers/Momentum players may annualize Q2 EPS to $.04 and apply a P/E of 10 to 25 , equating to a share price of $0.40 to $1.00.
- It is also worth noting that the company just started becoming more active on the investor relations front. For example, after a long hiatus of issuing no press releases , press release flow resumed in March 2014.
- Launched an e-commerce platform.
We caution readers that:
- we have performed no due diligence on CHFR, beyond reading its SEC filings.
- we presume CHFR will have to raise capital since its working capital is negative.
- the company has a history of reporting minor profits in the past, then resuming quarterly losses.